Page 78 - Companies & Dividend Tax
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Acquisition and Disposal of Shares
Issue or cancellation of shares by a company
• If a company issues shares to its employees in terms of
a broad based share incentive scheme (section 8B)
(section 8B is excluded from the SAICA taxation
examinable pronouncements) the company can claim a
deduction in terms of section 11(lA).
• If the company reduces or buys back its shares or goes
into liquidation or deregistration, then the cancellation
of shares would be at stake. Note that if the company
pays more for the shares than what it had received
when the shares were issued to the holder of a share/s,
it will be an appropriation of profits and that portion
will be a dividend
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